Crude close to peak on supply concerns
Reuters in London
Oil hovered near US$77 a barrel, close to this week's historic high, as continued output restraint by the Organisation of Petroleum Exporting Countries raised concern over tighter fuel supplies this winter.
US oil eased 20 US cents to US$76.66 in morning trade in London after rising 33 US cents on Thursday.
Prices hit a record US$78.77 on Wednesday but fell sharply on signs of improved refinery operations in the United States. London Brent slipped 37 US cents to US$75.39.
'People are concerned about overall crude and product stocks globally, as demand's still strong,' said Gerard Rigby of Fuel First Consulting.
'Plus there are funds buying, keeping prices bullish.'
Top consumer the US is worried that as refiners crank up, oil stocks will fall and tighten supplies.
US Energy Secretary Sam Bodman warned that oil prices had placed the world's largest economy in a 'danger zone'.
He urged the oil producers' cartel to raise output when it met next month.
Opec officials are also concerned about oil at US$80 but, with US crude inventories still well above historical norms, the group remains reluctant to turn up the taps.
Qatari Oil Minister Abdullah al-Attiyah said Opec could do nothing about high prices as there was no shortage of crude. US crude stocks fell 6.5 million barrels last week while both petrol and distillates increased.
The US is worried rising demand will drain crude stocks and lower supply
Peak price of crude reached this week due to Opec output restraint, in US$78.77